Cyreenik Says
This topic comes up because...
o This 22 Sep 15 WSJ article, The Assault on Drug Innovation Clinton tanks biotech stocks as she comes out for price controls., describes how the Social Justice movement is weighing in on drug costs.
From the article, "On Tuesday Mrs. Clinton joined Bernie Sanders in decrying what she called pharmaceutical “price gouging” and proposed a pontoon of new regulation that would transform the industry, including shortening the time-life of patents and allowing Medicare to “negotiate” drug prices. She’d also set quotas for research and development, though one of five U.S. R&D dollars are deployed by drug makers."
o The social media heat on this issue is scorching as well, with several articles about greedy drug makers and the unfairness of drug prices making the rounds. The current icon being Martin Shkreli, a biotech entrepreneur and former hedge-fund manager, who bought the rights to make Daraprim. This 26 Sep 15 Economist article, Hillary Clinton promises curbs on drug prices, brings up a key point that the "price gouger"-types are ignoring in this particular case -- the market size.
From the article, "For many products, a price rise of more than 5,000% is an open invitation for a competitor to come in and offer something similar for less money. But the market for Daraprim is so small that, even at its new price, it may not be worthwhile for another drugmaker to set up facilities to make it, and obtain the necessary approvals to sell it."
o This 28 Sep 15 Forbes article, The 30-Year-Old CEO Conjuring Drug Companies From Thin Air by Matthew Herper and Nathan Vardi, praises Vivek Ramaswamy for bringing so much biotech to the marketplace.
From the article, "Ramaswamy’s Bermuda-based company, Axovant Sciences, had been formed only eight months earlier, but here it was raising $360 million to develop an Alzheimer’s drug that had been all but abandoned by giant pharma GlaxoSmithKline."
In sum, biotech is a white-hot topic, both ways, and once again the US community is being rocked by the Progress versus Fairness question.
But the elephant in the room is being ignored.
The elephant is the incredible complexity and clumsiness of the US health care system as a whole. This ranges from the neo-guilds such as the AMA and the FDA, through the stranglehold that insurance companies have because they are doing all the paying, and now the cherry on top of all these previous decades of market twisters and inefficiency creators is the latest round of government intervention symbolized by Obamacare.
The social justice instinct of, "You poor people, we have to protect you." has mixed with the particularly vigorous blend of The Curse of Being Important that comes up when health care issues are involved. The result that has been building since the medical insurance tax breaks introduced during World War Two and Medicare introduced in the 1960's is a potent mix of government intervention mixed with regulatory capture laid over a free market economic system.
Adding to this mix in a much bigger way starting in the 2000's is a mountain of increase in our understanding of how the human body functions. This understanding is producing a mountain of new devices and new drugs which can make our health lives much better.
Lots of happy possibilities... but the net result that we in the US in the 2010's are living with something that is way too complicated and way too filled with "yes, but..."'s (my term) to really serve the community well. Because of the complexity and hoop-jumping, we are missing out on the even more blessings that our vastly expanded knowledge of biology could be bringing to us.
I'll get on my soapbox now: What we need in place of the current system is one I call Patient Pays which I write about in my book How Evolution Explains the Human Condition. In Patient Pays, basically, people get vouchers to pay for their health care, and they -- not the government, not the insurance companies, not the social warriors -- decide how to spend that money. The virtue of this is that the patient becomes the customer to the health care industry. The companies and people of health care are paid by the patient. This means these health care people and companies can pay attention to the patient. The patient is not just some ticket to be punched so that some other institution will pay them.
In my words (with arms, and perhaps hair, flying about), "And I say to you, my fellow Americans: It is time to simplify the system."
This is the issue the current heat about biotech should be addressing.
First a recap: Go back and read the much-updated version of what I wrote last month on the surprising popularity of Sanders and Trump.
With the economies of the world still in slow-growth mode, and the surge of migrants into the Eurozone, lots is happening that is bringing rising frustration to the middle classes of the world. If the middle classes of the world get frustrated enough with the current leaders and their current conventional solutions, they will support radical change. The more they do, the more this will bring upon us the rise of leaders with strange ideas and personalities. We will be experiencing another Time of Nutcases, similar to that of the late 1930's.
This 16 Sep 15 WSJ editorial, The Joy of Madness Donald Trump, Bernie Sanders and the mad-as-hell American electorate. by Daniel Henninger, is another description of our current Time of Nutcases.
Another echo of 1937: World Trade is down. This 19 Sep 15 Economist article, Becalmed A slowdown in global trade growth is bad news for many emerging markets, talks about how much world trade has been declining in 2015, even without protectionist barriers.
From the article, "World trade data bear out Mr Glading’s caution. In South Korea, a bellwether for the global economy, exports of goods fell by almost 15% year on year in August in dollar terms. In China, the most important link in global supply chains, exports were down by over 5%. British and American exports have also been slipping. In the first six months of the year global merchandise trade shrank by more than 13% year on year. From the mid-1980s until the middle of the last decade, annual trade growth stood at 7%."
And this 26 Sep 15 Economist article, When the tide goes out, which talks about the rising Time of Nutcases in Latin America, and this one, Playing with fire, about Malaysia.
Another long essay on the frustration behind the current Time of Nutcases: A WSJ 25 Sep 15 Saturday Essay The Middle-Class Squeeze If Western countries want to disprove the dire forecasts of Karl Marx, we must think creatively about how to make the middle class more prosperous and secure by Charles Moore.
And the US is not alone in feeling this frustration-leading-to-surprises. This 20 OCT 15 WSJ article, Trudeau Aims to Bolster Ties to U.S. Canada’s prime-minister elect signals a desire to broaden relations by Paul Vieira and Elena Cherney, talks about a frustration-fueled upset victory in Canada by Justin Trudeau.
From the article, "Justin Trudeau’s Liberal Party romped to victory over the Conservatives of Prime Minister Stephen Harper in Monday’s federal election, sweeping eastern and central Canada to increase the party’s strength from a third-place 36 seats in the last Parliament to an absolute majority of 184 in the new one. Mr. Trudeau announced a transition plan that would officially make him prime minister on Nov. 4, when he would name a cabinet."
The late summer news is heating up about the on-going crisis of migrants crossing the Mediterranean Sea to get into the Eurozone. The numbers of migrants is getting impressively high. About 200,000 Syrians have already been displaced and are in Europe. This lengthy 11 Sep 15 WSJ article, The Roots of the Migration Crisis The Syrian refugee disaster is a result of the Middle East’s failure to grapple with modernity and Europe’s failure to defend its ideals by Walter Russell Mead, describes the current situation nicely.
From the article, "The migration crisis enveloping Europe and much of the Middle East today is one of the worst humanitarian disasters since the 1940s. Millions of desperate people are on the march: Sunni refugees driven out by the barbarity of the Assad regime in Syria, Christians and Yazidis fleeing the pornographic violence of Islamic State, millions more of all faiths and no faith fleeing poverty and oppression without end. Parents are entrusting their lives and the lives of their young children to rickety boats and unscrupulous criminal syndicates along the Mediterranean coast, professionals and business people are giving up their livelihoods and investments, farmers are abandoning their land, and from North Africa to Syria, the sick and the old are on the road, carrying a few treasured belongings on a new trail of tears."
...And this is just the Syrian area portion of the problem. Regions surrounding Syria such as Iraq, Afghanistan, Yemen and various regions in North-of-the-equator Africa are also contributing heavily to the migration. In sum, this moving of people to leave harsh homeland conditions is getting big!
As I pointed out last month. The primary implication of this is that the governments and communities of the places these people are leaving are "doing it wrong" in the eyes of the migrants. This is why these people are leaving in such large numbers.
What has happened over the summer that is different from months and years previous is more and more of these displaced people are giving up hope that "home" will become "OK" for them in some reasonable amount of time. More and more they have become ready to move on.
This migrant despair has mixed with the Europeans' social justice feeling that "If these people are fleeing violence in their home land, it's OK if they come live in our nation." The further implication being: if this was being done for purely economic reasons -- getting better jobs and making a better living -- that would not be good justification for this migration.
It is becoming an interesting mix of events and attitudes. And I see it as unstable. I see many surprises in store.
Update: This 23 Sep 15 WSJ article, How the Birth Dearth Saps Economic Growth Worries about migrants miss that to avoid decline, Europe and the U.S. need many more people. by Ruchir Sharma, brings up the bright side of this issue. The bright side is that Syria and the other diaspora regions are sending their brightest and best to Western Europe to start new lives. This should bring about an economic renaissance starting in about five years.
From the article, "Europe, too, needs to focus on assimilating the migrants it needs, rather than build walls to keep them out. The European Union is now receiving refugees at the rate of about one million a year, but that represents only 0.2% of its population. No EU member has been as welcoming as Germany, which expects up to 800,000 refugees this year, many more than it takes normally. But Germany has the lowest birthrate in the world, at just over 8 births a year per 1,000 population. To maintain its current balance between its working-age population and retirees, it would have to accept some 1.5 million migrants every year for the next 15."
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